US-China Trade War Affects

PCBAssemblyEngineering

The European Union, Canada, China and Mexico have all implemented retaliatory tariffs
on American goods due to the US tariffs applied this year by the Trump Administration
on Chinese goods. American electronics manufacturers are especially vulnerable to
turmoil in their supply chains due to rare earth minerals and alloys used in many
products produced in the US, or overseas. Such items include: computer memory, DVDs,
rechargeable batteries, mobile phones, catalytic converts, magnets and lighting.
Although there has been some remedial progress made between the US, Canada, and
Mexico recently, it’s expected by economists and trade experts that expected affects
in the US are:

Tariffs to date increase the cost of raw materials and in some cases disrupt supply
chains. Often China is the only source of some goods. A shortage of raw materials
will likely result in the US.

Increases in costs will be passed on to consumers. In the US, this means higher
prices for locally assembled goods due to tariffs on B2B raw materials and components,
plus tariffs on consumer finished goods. In China, Mexico, Canada and EU members,
prices will increase on food and beverage items.

Durable goods sales in the US will be unaffected in the short term, unless merchants
are buying and selling goods made with raw materials and components, such as steel,
which have been slapped with tariffs. Online companies who sell goods made with
steel or aluminum, will have to raise prices or suffer lower margins to maintain
current pricing.

Any further escalation in tariffs resulting in more goods being taxed will raise
overall consumer prices and dampen ecommerce and more-traditional brick and mortar
sales.

To discuss how Optima can assist you with your sourcing decisions and minimize turmoil
and tariffs, please let us know a good time to schedule a call, or send your email
to optima@optimatech.net.